The growth in China’s fintech industry has alarmed many industry watchers. A notable name among them is Xiaomi’s Consumer lending Head, Shea Chen, who said that it was time to regulate the industry to enforce accountability and enable the development of the industry in the right direction.

Chen was also asked whether regulations should be kept the same until the time, the industry innovates fully. Chen is of the opinion that to carry out the innovations, the companies just need more liberty and space.

Chen also mentioned that currently, it is the responsibility of the companies to self-regulate themselves. However, if the companies are failing at this task, then it is up to the authorities as well as the government to enforce regulations to control the direction of the growth of the industry and to make sure that the industry is moving in the right direction.

When asked about the biggest threats to the fintech industry, Chen stated that financing, as well as risk management, are the 2 major risks for the industry. Chen also stated that some of the companies find it difficult to repay the dues even though, the availability of funds with them has increased. This has resulted in shrinking profits for the companies.

Would Xiaomi rival the Alibaba conglomerate? This idea has been made popular since it was published in Wall Street Journal back in 2015. At that time, wall street journal had reported that Xiaomi is planning enter the financial services sector. This would in-turn make Xiaomi step on the turf of Alibaba group.

While the jury is still out on whether that has happened, but should Xiaomi take a step in that direction, the competition is immense.

The Alibaba conglomerate is already ahead owing to their Alipay financial application. It already has over 0.9 million accounts in China and the number of active users currently stands at 0.35 million. The market cap of the company is around $70 billion. The pace at which Alipay is growing, soon it would be commanding a big chunk of the fintech industry in China. Even the traditional and conventional banking system customers are moving away to alternative banking platforms like Alipay.

Chen, however, is of the opinion that the opportunity is still ripe for Xiaomi irrespective of Wechat and Alibaba being a step ahead in the curve. Chen stated that if they are able to grow faster as compared to the rivals owing to a large base of customers, they will still be able to capture the market. Chen further stated, as they had above 190 million smartphone and tablet users already and above 60 million Internet of Things devices which were already in use, it would be easier for them to expand in the fintech industry.

Chen thinks that the market size provides enough room for Xiaomi to grow in the fintech industry in spite of 2 larger competitors that is WeChat and Alibaba being in the fray.